Mexicana Wire Works Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge about the manufacturing process, but he had toured the entire facility, located in the suburbs of Mexico City, and had met many people in various areas of the operation. Mexicana, a subsidiary of Westover Wire Works, a Texas firm, is a medium-sized producer of wire windings used in making electrical transformers. Carlos Alverez, the production control manager, described the windings to Garcia as being of standardized design. Garcias tour of the plant, laid out by process type (see Figure 7.20), followed the manufacturing sequence for the windings: drawing, extrusion, winding, inspection, and packaging. After inspection, good product is packaged and sent to finished product storage; defective product is stored separately until it can be reworked. On March 8, Vivian Espania, Mexicanas general manager, stopped by Garcias office and asked him to attend a staff meeting at 1:00 P.M. Lets get started with the business at hand, Vivian said, opening the meeting. You all have met Ron Garcia, our new management trainee. Ron studied operations management in his MBA program in southern California, so I think he is competent to help us with a problem we have been discussing for a long time without resolution. Im sure that each of you on my staff will give Ron your full cooperation. Vivian turned to Jos Arroyo, production control manager. Jos, why dont you describe the problem we are facing? Well, Jos said, business is very good right now. We are booking more orders than we can fill. We will have some new equipment on line within the next several months, which will take care of our capacity problems, but that wont help us in April. I have located some retired employees who used to work in the drawing department, and I am planning to bring them in as temporary employees in April to increase capacity there. Because we are planning to refinance some of our long-term debt, Vivian wants our profits to look as good as possible in April. Im having a hard time figuring out which orders to run and which to back order so that I can make the bottom line look as good as possible. Can you help me with this? Garcia was surprised and apprehensive to receive such an important, high-profile assignment so early in his career.

Mexicana Wire Winding, Inc.

Questions:

1. After the issue is defined, re-read and establish how Ron is constrained in this situation.

2. Define the variables that are pertinent to this case.

3. Upon analysis, what recommendations should Ron Garcia make?

4. What is the maximum profit?

Finished Product Storage Office Wire Drawing Rework Department Packaging Winding Raw Material Storage Extrusion Rejected Product Storage Inspection